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Whether a particular interest rate is greater than or less than the GDP growth rate seems to be irrelevant, or at least to miss a critical point. What seems more important for trends in inequality is the AMOUNT of interest extracted from the real economy of goods and services and transferred to the creditor class. The amount of such transfer depends on the rates of interest that apply to various categories of debt AND to the amount of debt in each category. Since, according to the FRB's latest Z-1, domestic nonfinancial sectors owe $73.5 tln, and GDP is only about $20 tln, even if the interest rate is much, much less than the growth rate (which it definitely is not), inequality of income will continue to grow. Looking back to the a period of stable inequality of income--1946-1972--interest rates were nearly always higher than the GDP growth rate. (Perhaps the ratio of debt to GDP was lower--I haven't checked.) Therefore, I suggest we need a better explanation for income inequality than interest rates and growth rates and a better policy tool than interest rate manipulations to address excessive inequality.

There is one thing I am grateful for to Project Syndicate. It is that it has helped me reconcile with the fact that I did not pursue a career as a professional economist despite my schooling. Reading PS has showed me that economists’ job is mainly to pander to politicians by supporting their lifestyle of using other people’s money. And, it seems the simpler the argument, the better, since it can be better packaged and “soundbited”.In the case of Professor Eichengreen, this is patent. Piketty's catchy and meaningless “r vs. g” mantra that sold over a million books is, at many hundred pages heavy with numbers, still a bit too complex to sell, so the Professor distills it further into:“Letters like r and g are difficult and can go either way. Interest rate is already too low so (darn!) we cannot push it lower. We cannot spend too much (maybe you need an economist to say how much), but we want to spend more.”If rates are low because little capital is needed, making it cheaper makes no sense. It should not be a mystery that risk premiums are high, if the risk of policy meddling is high and if we are in the middle of large transformations in society that may impact any for profit venture.With the US in the midst of a bubble on the price of collectivist spending, the worldwide advance of totalitarianism and an economics of the environment hijacked by peddlers of rose colored easy albeit expensive solutions, it is no wonder investment requires a risk adjustment. In reality, there should be a disclaimer: “No causal connection has been harmed in the making of this article.”

By phasing out "interest on reserves," the Fed could regain control of total world dollar liquidity. Then, if it used that control to bring the CRB Index up to 250 (from 181 now) and to keep it there, the problems of chronic economic underperformance chronic and underemployment would disappear.

Mao and Hitler, they also sold millions of books. Piketty too is a populist with vintage policies; taxing the wealthy is ultra popular, since most people prefer welfare state than merit.

In developed economies, r is nowhere higher than g. Just some junk bonds in very specific countries. So Piketty's premise is no longer valid. Second, he often confuses capitalists with lenders! In fact, capitalists manage to enlarge inequality over lower classes thanks to their access to credit, not the opposite!

The risk premia has disappeared. I can not believe what I read in this article. 5 points? I think you had 5 six-packs...

Whatever side of the economy Piketty talks about, he manages to justify additional taxes on the wealthy. It is intellectual indigence. But very fashionable. And like Goebbels, when you repeat a lie a million times, it morphs into undisputable truth.

Summers, another sailor of its kind. Rates left to their own devices? It's about 10 years that such species was declared extinct.

And YES, rates will go nominally negative sooner than many expect. Checking accounts too will go negative. But the proceeds will not benefit the banking sector. It will be like a tax by CB on cash on the sidelines (today that already exists for commercial banks in Europa, but retail clients will not be reaped until next recession).

CB will impose that tax to foster risky and productive investments, and in return, they will achieve the opposite, demand will frost. Literally.

And about deficit spending like there is no tomorrow. Yes. If the big economic blocs do it altogether in synchronicity, there is no limit on the deficits they can incur. Synchronicity will avoid any exchange rate seismic shift.

But if history is any guide, there is always one black sheep in the herd...and no one saw her coming!!!

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Mass protests over racial injustice, the COVID-19 pandemic, and a sharp economic downturn have plunged the United States into its deepest crisis in decades. Will the public embrace radical, systemic reforms, or will the specter of civil disorder provoke a conservative backlash?

For democratic countries like the United States, the COVID-19 crisis has opened up four possible political and socioeconomic trajectories. But only one path forward leads to a destination that most people would want to reach.

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